DOCKET NO.: FI710493RT, FL710350RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
GERTZ PLAZA
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
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IN THE MATTER OF THE ADMINISTRATIVE : SJR NO. 6442
APPEALS OF ADMINISTRATIVE REVIEW
: DOCKET NOS. FI710493RT
SEYMOUR and PEARL WASSERMAN, FL710350RO
TENANT-PETITIONERS : D.R.O DOCKET NO. EJ710245R
and
:
CROSSLAND SAVINGS BANK,
OWNER-PETITIONER :
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ORDER AND OPINION REMANDING PROCEEDING TO RENT
ADMINISTRATOR UPON RECONSIDERATION
The above named petitioners filed timely Petitions for Administrative Review
against an order issued on August 16, 1991, by the Rent Administrator, 50
Clinton Street, Hempstead, New York, concerning housing accommodations known
as Apartment 2P, 90 Knightsbridge Road, Great Neck, New York, wherein the
Rent Administrator determined that the prior owner had collected $16,600.40
in overcharges including interest, and $2,680.40 in excess security. The
Administrator directed the tenants to a court of competent jurisdiction if
they wished to seek rescission of a purported contract to purchase the
cooperative shares to the subject apartment.
The issues in these appeals were whether the overcharges were subject to
treble damages and whether the Administrator should have allowed a rent
increase for certain alleged improvements to the apartment, thereby reducing
the overcharge. Also at issue was the timeliness of the owner's petition.
These proceedings were consolidated as they involved common issues of law and
fact.
In an order issued October 5, 1992 the Commissioner granted the tenants'
petition in part and denied the owner's petition. With respect to the
owner's petition, FL710350RO, that Order and Opinion was issued pursuant to
a stipulation in an Article 78 proceeding before the Supreme Court, County of
Nassau, Justice Christ, dated June 3, 1992, Index Number 8384/92, which
directed the Division to issue an Order and Opinion in the underlying
Petition for Administrative Review within 125 days of June 4, 1992.
More specifically, the October 5, 1992 Order: (a) imposed treble damages as
sought by the tenants in their appeal; (b) used the prior rent as the lawful
rent for the period covered by the Administrator's order; (c) declined
without prejudice to consider the lease renewal contentions raised by the
tenants for the first time on appeal; (d) treated the owner's appeal as
timely, in part because the Administrator had served the order only on the
prior owner; and (e) refused to reduce the overcharge despite certain
improvements alleged to have been made to the subject apartment because the
DOCKET NO.: FI710493RT, FL710350RO
documentation of same was submitted for the first time on appeal without good
cause.
In an Order issued December 2, 1992, the Commissioner granted the owner's
request for reconsideration of the October 5, 1992 Order, finding that it
"should be reopened and remanded to the Rent Administra
tor for the limited purpose of determining whether when,
by virtue of a judicial sale or its equivalent, the
current owner, a banking institution which became the "de
facto" owner upon the prior owner's defaulting on its
mortgage, should be relieved of liability for treble
damages. Triable issues of fact exist concerning the
Bank's willfulness and corresponding liability for treble
damages. The Bank, as "de facto" owner, has the burden
of establishing by a preponderance of the evidence that
the overcharge was not willful. Factors to be considered
in determining the issue of the Bank's willfulness should
include its refund of all overcharges prior to the
determination of the PAR by the Agency; was such refund
made within a reasonable time after the Bank acquired the
premises; whether the Bank relied upon rent records
provided by its predecessor; whether that reliance was
reasonable, and whether the Bank otherwise had reason to
know or should have known that an amount in excess of the
lawful rent was being charged. The aforegoing are some
of the factors bearing on a finding of willfulness which
must be explored at a hearing before an Administrative
Law Judge of this Agency.
"Accordingly, the matter will be reconsidered on the
basis of the original Petition for Administrative Review
together with the evidence presented in this request for
reconsideration and relevant comments received in reply
thereto.
. . .
"Pending the issuance of a new order and determination,
the tenants are directed to pay the monthly rent provided
in the Administrative Review Order and Opinion Nos.
FI710493RT and FL710350RO, issued on October 5, 1992. In
all other respects, the aforesaid order is stayed pending
the issuance of the new order and determination."
The Commissioner is of the opinion that the proceeding should be remanded.
THEREFORE, in accordance with the Emergency Tenant Protection Act and
Regulations, it is
DOCKET NO.: FI710493RT, FL710350RO
ORDERED, that this proceeding be remanded to the Rent Administrator for
further processing, including a hearing, in accordance with this Order and
Opinion, and with the December 2, 1992 reconsideration order. The October 5,
1992 Order and Opinion of the Commissioner is stayed pending the issuance of
a new order on remand. However, the tenants are directed to pay the rent
provided in the October 5, 1992 Order.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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